Just a few quick things and I'll leave it at that since there isn't any real movement here
As far as damage indicators removing the advantage from those catching other ships off guard, I don't think it would really make much of a difference. It still takes time to turn around or actually find the opposing ship, organize your crew, launch an attack, repair damage, etc. I feel this should still be enough to tip the scales heavily in favor of the attacker. If you surprise someone and still end up on the losing end your strategy is flawed. (I know you guys have a lot more experience than I do so I only say this generally)
As far as the current icons, they float. This is not helpful in any way. More helpful would be a static display of ship components. Having critical UI components move around does not help usability in the slightest. --Is my balloon OK? I don't know, first I have to find the icon. -- Look, i have an engine on fire. Which one? I don't know. It's a minor gripe but with you guys touting the present system I think its relevant. There are many ways to make static UI components unobtrusive.
Many other games have hit indicators (when you strike an opposing player or what not). Even on consoles, which have constant specs. I don't think its accurate to say it mainly exists as a graphical fallback. It exists because its helpful. In the same vein, displaying when you yourself are hit is a very common solution to the physical separation problem imposed on any virtual medium. What if the person is playing without sound? What if they have graphical settings low enough to eliminate partical effects. I think the current UI solution is passable at best and non-user-friendly at worst.
Really, we should want the game to have minimal barriers to entry. People attempt to pilot for the first time, get the crap kicked out of them without knowing from who, what, or where and it can be discouraging. There's a reason certain UI elements, like the damage indicator, have become standard practice: they work. Having a difficult game is great for dedicated veterans but you lose a lot of recreational players, and thereby a lot of money.